Fertility treatments are changing the meaning of inheritance

By Paul Sullivan / NY Times News Service

Tue, Sep 03, 2013 - Page 9

The number of children conceived through in vitro fertilization (IVF) has doubled over the last decade. The technology that has made these children possible has also challenged inheritance laws, especially in circumstances when a child is conceived after the death of a parent.

While this may sound bizarre, posthumously conceived children can become a quandary for the rich and the not-so-rich alike. The problem is always about money. The rich worry about who will get their assets after they are dead, while people of more meager means have turned to the courts in the hope of collecting federal benefits.

“We’re going to see a flurry of activity on this, because new technologies are ballooning,” Wilmington Trust managing director and New York City Bar Association chairwoman of the trusts, estates and surrogate’s courts committee Sharon Klein said.

“You read about women in their late 20s and early 30s who are saving their eggs, and want to focus on their careers and haven’t met the right partner yet,” she said.

The woman’s eggs could be used to produce a child even if the woman never wanted the eggs used after her death.

The law is clear on one thing: when a trust document does not address the issue “children born with the new technology are entitled to inherit with the same rights as a natural-born child,” Klein said.

Consider the example of a sick person who, before undergoing chemotherapy that will cause sterility, donates sperm or eggs to be frozen, in hopes of having children later. The patient intends to have the children after recovery. But should the patient die without something in writing stating this intent, the surviving partner could have a claim on that genetic material and could use it to produce a child.

Other possibilities exist. A couple who has embryos left over after having children through in vitro fertilization could, instead of destroying them, donate them to a woman, essentially giving her a child they created. That could have unintended consequences.

“It’s not inconceivable now that if the father and mother of that embryo were to strike it rich, the child born of that other woman could say: ‘Those are my genetic parents,’” a partner at White & Case John Olivieri said.

If the child says that, chances are he or she would ask for a share of the genetic parents’ wealth.

“Posthumous reproduction is the perfect storm of competing interests,” University of Minnesota School of Law professor of law Susan Wolf said. “There’s the surviving partner who wants to reproduce, the interests of the deceased while they were alive or as they memorialized them, the pre-existing kids who don’t want their interest diluted and finally the kids who are brought into the picture, but who may be financially most at risk.”

Several lawsuits have already tested this issue, and many more have been settled privately, lawyers said.

In 2007, the New York County Surrogate’s Court decided in the case regarding Martin B. that two posthumously conceived children could benefit from a trust created by their grandfather, Martin B., for his two sons and any grandchildren. (Real names were not used in the suit to protect the children.)

LEGAL BATTLES

The case was brought jointly by Martin B.’s wife and the widow of their son, whose frozen sperm had been used to conceive two children three and five years after his death. They wanted to know whether the posthumously conceived children were descendants for the purpose of the trust.

The answer decided whether tens, if not hundreds, of millions of dollars from the estate of Martin B. went to those children or if all of it was divided among the surviving son and his children.

What made this case even more intriguing was that Martin B.’s wife had the ability to divide the assets in the trusts her husband set up as she saw fit. Lawyers on both sides said even if her posthumously-conceived grandchildren were not considered, she could have cut her living son out of his inheritance.

“Biologically, were they the grantor’s grandkids? Yes,” the lawyer who represented Martin B’s wife Jonathan Blattmachr said. “But legally, were they his grandkids? Most people would say yes.”

Olivieri, who represented the surviving son, had a different interpretation, hinging on the motivation of the widow for conceiving two children after her husband’s death.

“My take is here is a woman who married into a wealthy family,” he said. “The only way she could stay on the gravy train was by having his children.”

“She wasn’t hated. She was going to be OK. But she got herself a better situation,” he added.

While she did not directly benefit from the settlement, her children were ultimately deemed to be descendants and therefore entitled to distributions from the trust.

At the other end of the economic spectrum is the case of Astrue v. Capato. It was brought by Karen Capato against the Social Security Administration to claim benefits for twins conceived after her husband died.

Last year, the US Supreme Court reversed a lower-court ruling and said that state law should determine such claims. Since at the time of his death the father lived in Florida, which does not recognize posthumously conceived children not mentioned in a will, she could not receive social security benefits for them. Right now about a third of the states have laws recognizing the rights of posthumously conceived children; of that group, Ohio is the only other one that does not allow them to received federal benefits.

So how should people wade through this murky area of the law and ensure that children who are genetically linked to them are treated fairly?

In the example of the couple with leftover embryos from their own IVF, Olivieri said he would encourage them to write into their estate documents that frozen embryos exist, but that children born to someone else using those embryos are not considered descendants.

BALANCING INTERESTS

When it comes to setting up a trust for children conceived after death, the conversation shifts. Joshua Rubenstein, managing partner at Katten Muchin Rosenman in New York, who represented the surviving brother’s children in the Martin B. case, said he had pressed clients to consider this issue for more than a decade.

“To anyone who thinks about it, 99 times out of 100 they don’t want to include children born after they’re dead,” he said. “They’ve lived with their own kids, and they want them to get their things and not some kid who was born years later that they never knew.”

Rubenstein said that he had represented both sides of this issue and that he counseled people planning to conceive a dead spouse’s child posthumously to understand that having the right to use genetic material for a child is not the same as having the right to inherit as if that spouse were still alive.

If a trust prohibits children born to unwed parents from inheriting money, there could be problems. Any child conceived posthumously automatically falls into this category, because the parents are no longer married when one of them is dead, Rubenstein pointed out.

If they don’t exclude those children, Klein said clients generally set a time limit for them to be conceived. Otherwise a frozen embryo could be used decades later and be considered a descendant, eligible for a share of an estate that has already been settled.

Of the states that have passed laws clearing up the inheritance rights of posthumously conceived children, eight have set time limits of one to three years.

In New York, proposed legislation that would set inheritance guidelines for posthumously conceived children requires written consent from a person that genetic material can be used posthumously, and sets a time limit on when the child must be conceived and born.

Klein said setting a time limit was important in all cases and should be written into estate plans.

“The fundamental issue is balancing competing interests,” she said. “There is the need for certainty and finality versus the interests of these children born as a result of scientific advancement.”